Delta Air Lines, Inc. (NYSE:DAL) Q3 2020 Earnings Conference Call - Final Transcript

Oct 13, 2020 • 10:00 am ET


Delta Air Lines, Inc. (NYSE:DAL) Q3 2020 Earnings Conference Call - Final Transcript


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Good morning, everyone, and welcome to the Delta Air Lines September Quarter Financial Results Conference Call. My name is Cassidy, and I will be your coordinator. At this time, all participants are in a listen-only mode until we conduct a question-and-answer session following the presentation. As a reminder, today's call is being recorded.

I would now like to turn the conference over to Jill Greer, Vice President of Investor Relations. Please go ahead.

Jill Greer

Thanks, Cassidy. Good morning, everyone, and thanks for joining us for our September quarter earnings call.

Joining us from Atlanta today are our CEO, Ed Bastian; our President, Glen Hauenstein; and our CFO, Paul Jacobson. Our entire leadership team is available for the Q&A session.

Ed will open the call with an overview of Delta's performance and strategy; Glen will provide an update on the revenue environment; and Paul will discuss cost, liquidity and our balance sheet. We'll then go to our Q&A and ask you to limit yourself to one question and a brief follow-up, so we can get to as many analysts as possible.

Today's discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements. Some of the factors that may cause such differences are described in Delta's SEC filings.

We'll also discuss non-GAAP financial measures, and all results exclude special items, unless otherwise noted. You can find a reconciliation of our non-GAAP measures on the Investor Relations page at

And with that, I'll turn the call over to Ed.

Ed Bastian

Well, thanks, Jill. Good morning, everyone. Appreciate you joining us today. This morning, we reported a $2.6 billion adjusted pre-tax loss on a 79% decline in revenues for the September quarter. We ended the quarter with over $21 billion in liquidity, having brought our cash burn down to $18 million per day in the month of September. While we still have a long road ahead of us when you look through the large toll that the pandemic has taken, we are showing progressive improvement across the business, performing well on factors within our control and ensuring the company is well positioned as demand starts to return.

And there are signs that customers are becoming increasingly confident in returning to air travel with TSA counts growing each week. But we are still running at a fraction of our normal capacity and expect that our December quarter revenues will be 30% to 35% of what we saw a year ago.

With that improvement in context, our revenues bottomed out in the second quarter at only 10% of prior year levels. We're at 21% of prior year levels in the third quarter and we expect them to be roughly one-third of prior year levels in the fourth quarter. Steady improvement as Q4 is expected to generate three times the revenue of Q2, but still a long way to go.

To see a meaningful step-up in